9911796707
TMI Blog2022 (4) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 ("the Act") for donations made to various institutions. 2] It is petitioner's case that since the entire amount of donations had come out of CSR and CSR amount already debited to the profit and loss account, the donations in other expenses were shown as Nil in "Note 25". The claim of deductions under sections 35AC and 80G of the Act was also reflected in clauses 19 and 33 respectively of the Tax Audit Report. 3] Petitioner fled it's return of income for A.Y. 2015-16 on 18.11.2015 which came to be revised on 20.02.2017 declaring total income of Rs. 396,12,52,460. In the return of income, petitioner made disallowance of the amount of Rs. 3,30,82,713 being the CSR amount in accordance with Explanation 2 to section 37 of the Act. According to petitioner, since the donations made to various institutions qualified for deduction under section 35AC and 80G of the Act, it claimed the same. 4] Petitioner's return of income was selected for scrutiny and assessment order came to be passed under section 143(3) read with section 92CA of the Act on 18.02.2019. During the course of assessment proceedings, petitioner was asked queries including one in notice dated 08.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Balance Sheet, Tax Audit Report, etc.), it is revealed that the assessee has debited an amount of Rs. 3,30,82,713/- towards Corporate Social Responsibility (CSR) activities and NIL towards donation which were added back in the computation of income statement. Audit scrutiny revealed that against the above amounts, the assessee has claimed deduction of Rs. 1,07,50,000/- under section 35AC and Rs. 70,25,000 (50% of Rs. 1,40,50,000) under section 80G of the Act. As the expenditure, same expenses cannot be claimed as deduction under other heads and it will defeat very purpose of making CSR expenditure mandatory. There is specific provision in 80G and 35 AC to allow CSR deduction as expenditure." 8] Therefore, respondent No.1 admits that deduction has been allowed in the assessment proceedings. It is therefore, obvious that based on same primary facts, the Assessing Officer is proposing to, on change of opinion, commence the proceedings for reassessment. He is not entitled to do so. It is settled that where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on very same material with a v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be ultra vires, being in excess of the jurisdictional restraints imposed by the frst proviso to Section 147 of the Act". 12] The factum of failure to disclose cannot be culled from the reasons in support of notice seeking reopen the assessment. This will certainly be fatal to the assumption of jurisdiction under sections 147 and 148 of the Act. 13] As regards petitioner's submission that reopening is based on audit objection and the respondent's admission that there was audit objection. It will be appropriate to reproduce paragraph 8 of unreported judgment dated 23.03.2022 in Writ Petition No. 694 of 2021 Sodexo India Services Pvt. Ltd. vs. Assistant Commissioner of Income Tax- Circle -13(2) (1) and ors., which reads as under : "8. In Hamilton Housewares (P) Ltd. Vs. Deputy Commissioner of Income Tax (2019) 104 taxmann.com 128 (Bombay), this Court while quashing the notice issued u/s 148 of the Act reiterated settled position of law that the decision to reopen assessment must be on the basis of the belief found by the Assessing Officer. It must be open for the audit party to bring relevant aspect to the notice of the Assessing Officer. But thereafter it must be the independe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objections fled by Petitioner through their Chartered Accounts' letter dated 23 September, 2019, reopening is made on the basis of the objections received from the revenue audit cell, usually referred as audit objections. Identical objection, as raised in the reasons for reopening, was raised and communicated to Petitioner on 14.03.2019. Petitioner, in response to the audit queries, had provided clarifications to the Assessing Officer. It is a well laid down principle that the re-assessment proceedings initiated merely on the basis of the audit objections are illegal and not valid in law and as such reassessment proceedings have been repeatedly again quashed and set aside by the Courts. As held in : (i) Indian and Eastern Newspaper Society v/s. CIT (1979) 119 ITR 996 (SC) : "AO having allowed assessee's claim for depreciation in the regular assessment and reopened the assessment pursuant to audit objection, it cannot be said that he had formed his own opinion that the income had escaped assessment, and the reopening being based on mere change of opinion, same was not valid." (ii) ICICI Home Finance Co. Ltd., vs. ACIT (2012) 25 taxmann.Com 241 (Bom.): "The reasons do not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons put up for approval on 26.03.2021, which is after the expiry of four years from the end of the relevant assessment year 2015-2016 and approval was granted on 30.03.2021. Therefore, Mr. Joshi submitted that as per Section 151 of the Act, as four years have elapsed at the time of reopening, the sanction is required to be obtained from the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax and since the sanction has not been obtained from any of these four Commissioners of Income Tax, the notice issued is bad in law. 20] Sub-Section 1 of Section 151 of the Act provides that no notice shall be issued under Section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a ft case for the issue of such notice. 21] Admittedly in this case, four years from the end of the relevant assessment year A.Y. 2015-16 has expired before the issuance of notice and the approval also has been obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
